According to a report by the Times of Israel, the country’s two largest banks were able to transfer $1 billion out of Silicon Valley Bank to accounts in Israel before it was seized by the feds.
Silicon Valley Bank (SVB), the 16th largest bank in the United States at the time of its failure late last week, collapsed after a run on deposits and was placed into the receivership of the Federal Deposit Insurance Corporation (FDIC).
The bank’s collapse represented the second biggest bank failure in U.S. history, with the FDIC being forced to guarantee 100 per cent of both insured and uninsured customer deposits.
While the collapse of SVB took many by surprise, financial authorities in Israel were apparently ahead of the curve.
“Israel’s two largest banks, Bank Leumi and Bank Hapoalim, set up a situation room that has been operating around the clock to help firms transfer their money from SVB — before it was seized — to accounts in Israel,” reports the Times of Israel.
“Over the past few days, teams at LeumiTech, the high-tech banking arm of Bank Leumi, have been able to help their Israeli clients transfer about $1 billion to Israel, the bank said.”
While many companies in the U.S. were not able to withdraw funds before the bank’s failure, Ha’aretz reports that “a good many Israeli companies had been able to get their money out in time, but that it was clearly not the case for everyone” and that “companies whose deposits are now locked will seek to conceal this, concerned that any rumors might drive away customers, suppliers and employees.”
With Israel already receiving $10 million a day via U.S. taxpayers, it remains unclear if the FDIC will be returning any money to Israeli companies that was previously held with SVB.
“While the fund going to the depositors is paid into by U.S. banks, it is ultimately backstopped by the Treasury Department — and therefore U.S. taxpayers,” reported the Washington Post.
As we highlighted yesterday, Signature Bank in New York was also shut down by regulators on Sunday, with some observers noting that it was the same bank to close down Donald Trump’s accounts following the incident at the Capitol on January 6, 2021.
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Congressional Witness: Liberals Siding with Corporations to Keep Wages Down via Mass Immigration
Liberals are siding with corporate America over the nation’s workers.
Liberals are siding with corporate America over the nation’s workers in their promotion of mass immigration, a key tool in keeping wages down, Center for Immigration Studies Director of Research Steven Camarota told lawmakers this week.
During a hearing before the House Health, Employment, Labor, and Pensions Subcommittee, led by Chairman Bob Good (R-VA), Camarota said liberals — such as President Joe Biden — have broken with historical precedent in recent decades to defend the interests of corporations against American workers when it comes to national immigration policy.
“Historically, progressives from Eugene Debs to A. Philip Randolph, they got that if you have lots of immigration, you tend to push down wages,” Camarota said:
Unfortunately, a lot of progressives are lying with corporate America on this — they want low wages. And they’re perfectly happy to ignore this crisis of non-work among working-age people, particularly the U.S.-born. Immigrants haven’t suffered this same problem. It’s particularly U.S.-born men without a college degree and we know it’s a social disaster. [Emphasis added]
Even former President Obama, in his 2006 book The Audacity of Hope, admitted that illegal immigration threatened the wages of America’s working class:
"The number of immigrants added to the labor force every year is of a magnitude not seen in this country for over a century."— NumbersUSA (@NumbersUSA) August 30, 2020
— Barack Obama, The Audacity of Hope pic.twitter.com/R10Np1r2m1
As Breitbart News reported, Camarota estimates that more than 44 million native-born Americans remain on the labor market sidelines — not including the millions of native-born Americans counted in monthly unemployment figures.
“If we curtailed immigration and enforced our law, we would be forced to draw these people back which will not be easy … less immigration would be enormously helpful but it is not the only issue,” Camarota said:
One of the things immigration is doing is holding down wages, there’s some crowding out … it’s letting us ignore this problem [of non-work]. If we didn’t have access to all this immigrant labor, employers and the American people … would demand that we try to reinstill the value of work. Raising wages would be one of the most important things to make work more attractive. Immigration lets us not do any of that, including the current flow of massive illegal immigration. [Emphasis added]
‘Bidenomics’ Fail: Food Stamp Bonanza Sends Grocery Bills Soaring 15%, Study Finds
In a classic move by those on the left — democrats, socialists, and everyone in between with seemingly no grasp of what sparks inflation — championed the Biden administration’s move in 2021 to increase food stamp spending by the most in history, hiking benefits by an average of 27%.
In 2022, the Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP) spending hit a record high of $119 billion, a sixfold increase over the last two decades. In 2019, taxpayers were on the hook for $4.5 billion per month on food stamp benefits. By December 2022, monthly food stamp spending soared to $11 billion.
According to findings from the government watchdog Foundation for Government Accountability (FGA), previewed by Fox News, the administration’s massive expansion of food stamp benefits could be responsible for a 15% spike in grocery store prices.
FGA called Biden’s rush to increase SNAP benefits an “unlawful expansion—which bypassed Congress—will cost taxpayers $250 billion over the next decade and has heavily contributed to soaring grocery prices.”
“Congress should repeal President Biden’s unlawful food stamp expansion and ensure this type of executive overreach cannot happen again. In doing so, Congress could save taxpayers more than $193 billion over the next decade,” it added.
The good news is the emergency allotments expired earlier this year, but food stamp spending remains $8.6 billion in March. The Congressional Budget Office estimates SNAP spending will cost taxpayers nearly $1.1 trillion over the next decade.
“USDA cooked their books to hike food stamp benefits by 27% — the largest permanent increase in program history. And they bypassed Congress to do it,” said Jonathan Ingram, Vice President of Policy and Research at the Foundation for Government Accountability.
Ingram noted, “Data show the Biden administration’s overreach led to massive spikes in grocery prices. They’re feeding inflation, not stopping hunger.”
The index for food at home (groceries) has skyrocketed ever since Biden increased SNAP benefits.
As food inflation soared, Biden’s officials, seemingly detached from economic reality, pointed the finger at food companies for raging food inflation.
If FGA is correct, this is another sign that ‘Bidenomics’ has been a disaster for low/mid-tier consumers drowning in inflation.
It’s one giant EBT party…This post was originally published at Zero Hedge
Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion
There was a shocking number in today’s latest monthly US Budget Deficit report. No, it wasn’t that US government outlays unexpectedly soared 15% to $646 billion in June, up almost $100 billion from a year ago…
… while tax receipts slumped 9.2% from $461 billion to $418 billion, resulting in a TTM government receipt drop of over 7.3%, the biggest since June 2020 when the US was reeling from the covid lockdown recession; in fact never have before tax receipts suffered such a big drop without the US entering a recession.
Needless to say, surging government outlays coupled with shrinking tax revenues meant that in June, the US budget deficit nearly tripled from $89 billion a year ago to $228 billion, far greater than the consensus estimate of $175 billion. One can only imagine which Ukrainian billionaire oligarch’s money laundering bank account is currently enjoying the benefits of that unexpected incremental $50 billion US deficit hole: we know for a fact that the FBI will never get to the bottom of that one, since they can’t even figure out who dumped a bunch of blow inside the White House – the most protected and surveilled structure in the entire world.
And with the monthly deficits coming in higher than expected and also far higher than a year ago, it is also not at all surprising that the cumulative deficit 9 months into the fiscal year is already the 3rd highest on record, surpassed only by the crisis years of 2020 and 2021: at $1.393 trillion, the fiscal 2022 YTD deficit is already up 170% compared to the same period last year.
Again, while sad, none of the above numbers are surprising: they merely confirm that the US is on an ever faster-track to fiscal death, but not before the Fed is forced to monetize the debt once again (one wonders what financial crisis the Jekyll Island folks will invoke this time to greenlight the next multi-trillion QE).
No, the one number that was truly shocking was found all the way on page 9, deep inside Table 3 of the latest Treasury Monthly Statement: the only highlighted below, and which shows that in the 9 months of the current fiscal year, the US has already accumulated a record $652 billion in gross debt interest.
This number was more than 25% higher compared to the Interest Expense payment for the comparable period a year ago, which amounted to $521 billion.
Soaring interest rates, driven by the panicked Fed’s scramble to undo its epic policy failure of 2020 and 2021 when the Fed kept rates at zero for far too long while injecting trillions into various asset bubbles, have been the key driver of the deficit, with the Federal Reserve boosting its benchmark rate by 5% since it began hiking in March last year. Five-year Treasury yields are now about 3.96%, versus 1.35% at the start of last year. As lower-yielding securities mature, the Treasury faces steady increases in the rates it pays on outstanding debt: that’s right – even when the Fed starts cutting rates, due to the delay of rolling over maturing debt, actual interest payments will keep rising for the foreseeable future.
For context, the weighted average interest for total outstanding debt at the end of June was only 2.76%, a level that’s not been surpassed since January 2012, according to the Treasury. That’s up from 1.80% a year before, the department’s data show, and if the Fed indeed keeps rates “higher for longer”, the blended rate on the debt will surpass 4% in one year.
That would be a complete disaster for the US, and it would mean that interest payments on total US debt of $32.3 trillion would hit $1.3 trillion within 12 months, potentially making interest on the debt the single biggest US government expenditure and surpassing social security!
But we don’t even have to wait that long until the exploding interest on US government debt becomes a major talking point ahead of the coming presidential elections. According to the St Louis Fed’s FRED and the BEA, the interest payments by the Federal Government have now surpassed $900 billion for the first time ever, and within a quarter will hit probably rise above $1 trillion, a historic benchmark that will probably begin the countdown to the US Minsky Moment.
One of the most incompetent puppets in the Biden admin (and there are countless), Treasury Secretary Janet Yellen, has played down concerns about higher rates. She has instead flagged that the ratio of interest payments to GDP, after adjustment for inflation, remains historically low. The problem with Yellen’s argument is that GDP will crater after the next recession (which will also spark the next financial crisis, one which Yellen will not live to see), but US debt will never again drop in either absolute or relative terms, as the good folks at the CBO have been so kind to make clear to even such intellectual midgets as the former Fed chairwoman.
In short, the endgame has now arrived, and all the US can do now is rearrange the deck chairs.This post was originally published at Zero Hedge
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